The cultural impact on market entry and business development in Thailand

Along with numerous socioeconomic, political and technological challenges, the Swiss company may face, entering the Thai market raises the problem of substantial cultural barriers between the traditional organizational culture of the Swiss company and the actual cultural environment in Thailand. What is meant here is the fact that the subsidiary of the Swiss company will need to adapt to local cultural traditions and norms, whereas the company should learn local cultural traditions and norms to develop its business successfully in Thailand. In this regard, it is worth mentioning the fact that the Swiss company will have to develop the effective management style that meets needs and expectations of local employees and introduce business practices that meet local cultural traditions and norms.

At this point, the company should pay a particular attention to the cultural impact on negotiating in Thailand. Obviously, cultural traditions and norms of Thailand affect consistently the negotiation process. Therefore, the company cannot use effectively negotiation techniques, which it applies in Switzerland and Europe, for instance. In contrast, the company should take into consideration local cultural specificities and develop negotiation techniques, which are effective in the cultural environment of Thailand. In this regard, it is worth mentioning the fact that the existing strict hierarchy implies specific rules of negotiations. To put it more precisely, the company should respect the strict subordination existing in the Thai society and it cannot implement the democratic and liberal negotiation style, where each member of the negotiating team has equal rights and status. Instead, there should be the leader, who is responsible for negotiations and the negotiation team should subordinate to the leader. Therefore, negotiations should be conducted by responsible and respectable individuals, who have the authority in the organization and business partners.

At the same time, negotiators should represent the entire organization because the Thai culture has a strong trend to collectivism, which puts organizational interests above individual ones. In addition, the Thai culture implies the high level of diplomacy which is essential for successful negotiations. In fact, negotiations in Thailand are not conducted directly. Instead, negotiating parties should be very diplomatic in relation to each other and respect each other. They cannot push on each other because this would be unethical and contradict to existing cultural norms of negotiating in Thailand.

The strict organizational hierarchy and collectivism make the decision-making process in the course of negotiation difficult because the negotiating team is responsible for the entire organization and team members may have difficulties, while taking decision because they have to take consultations and take decision collectively.

On the other hand, the role of the leader is particularly important in negotiations in Thailand. In fact, the leader can take a decision but he or she should take into account the position of negotiating team members, interests of the organization and employees working in the organization (Acharya, 1999). Therefore, the decision-making process becomes extremely complicated and difficult, whereas the role of the leader is particularly important in the negotiation process because he or she has the highest authority. By the way, females are still in a disadvantageous position in Thailand and female leaders will have substantial difficulties to gain the respect of their subordinates. Hence, the Swiss company may face the problem of poor tolerance in gender-related issues.
At the same time, the cultural impact on marketing the company’s product in Thailand may be also very significant because the company enters the new market. In spite of the extensive experience and high quality of its products, the company has to gain the confidence of local customers. In addition, local customers have their own tastes and preferences and the company should adapt its products to local specificities because its original products may fail to meet tastes of local customers.

Furthermore, the company should focus on organizational needs instead of individual ones because the Thai culture is the collectivist one (Kanoksilp and Keawkumnurdpong 1999). Therefore, the company should respect collectivism and take care of needs of employees. The positive, healthy organizational culture is essential for the successful implementation of the marketing strategy of the company. In fact, the efficient marketing is impossible, if the company fails to meet needs and expectations of employees because, in such a situation, the risk of conflicts emerges and threatens to the position of the company in the market. In this regard, employees should be confident in their organization and its benefits on the local community. In fact, this is one of the specificities of the Thai culture because Thai people are very concerned with the well-being of their community and organization, which they often put above their own, personal well-being. Therefore, the local community should be the primary concern of the organization because, if the company has a negative impact on the local community, the company will fail to enter the Thai market successfully. In such a way, the company should meet cultural specificities of Thailand to develop its business in the country successfully. If the company meets cultural specificities of Thailand, it can promote its product successfully and to develop its business in Thailand. Obviously, the respect to the local culture is essential for the successful marketing because it contributes to the formation of a positive public image of the company among customers and prevents internal conflicts within the organization leading to the formation of a positive, healthy organizational culture.